One apartment complex’s rule: You write a bad review, we fine you $10k

photo: arstechnica.com

Trying to control customer opinions online is nearly always a losing game for a business, and there's now a long line of cases where it has backfired on companies. We uncovered a new example this month, when a reader contacted Ars Technica to show us the "Social Media Addendum" that his Florida apartment complex, called Windermere Cay, included in his lease.

The Social Media Addendum, published here, is a triple-whammy. First, it explicitly bans all "negative commentary and reviews on Yelp! [sic], Apartment Ratings, Facebook, or any other website or Internet-based publication or blog." It also says any "breach" of the Social Media Addendum will result in a $10,000 fine, to be paid within ten business days. Finally, it assigns the renters' copyrights to the owner—not just the copyright on the negative review, but "any and all written or photographic works regarding the Owner, the Unit, the property, or the apartments." Snap a few shots of friends who come over for a dinner party? The photos are owned by your landlord.

Contacted by Ars, a manager disclaimed the contract—even though it had been given to a tenant to sign just a few days before.

Before one even gets to the terms of the Social Media Addendum, renters have to get through this explanatory paragraph:

There is a growing trend... where tenants will post unjustified and defamatory reviews regarding an apartment complex in an attempt to negotiate lower rent payments, or otherwise seek concessions from a landlord. Such postings can cripple a business by creating a false impression in the eyes of consumers. The damages resulting from this false impression can include potentially millions of dollars in economic losses, and have permanent consequences that can unjustly destroy a business.

The Addendum was provided to Ars by a resident of Windermere Cay who asked that his name be withheld. In this article, he'll be referred to as Martin. He moved in to the complex in early 2014, selecting it because it's an easy commute to his engineering job at an Orlando company. Martin describes Windermere Cay as a five-building complex, with each building holding about 30 apartments.

He never had any intention of writing a review of his apartment, good or bad. Still, he told the management that he wouldn't sign the Social Media Addendum on principle.

"If I took a photo of people in my apartment, they would own it," he said in an interview with Ars. "It's just ridiculous."

So in 2014, Martin asked to have the addendum removed from his lease. "They said, we'll talk to the property managers," Martin said. He didn't hear anything else about it.

This year, once his lease was up, Martin was given another year-long lease to sign. Despite his complaints and earlier refusal to sign, he was again given a Social Media Addendum to sign. Once more, he told management he disagreed with the terms of the document and wanted it removed.

"It was still in there," he said. "I assume if people don't question it, they would sign it."

Asked about the Social Media Addendum by Ars, Windermere Cay's property manager sent this response via e-mail: "This addendum was put in place by a previous general partner for the community following a series of false reviews. The current general partner and property management do not support the continued use of this addendum and have voided it for all residents."

While the addendum may be "voided," residents clearly haven't gotten the memo. Martin had been given a copy of the addendum just days earlier, and it's surrounded in a sheaf of other typical renter paperwork, such as mold and lead disclosures. The manager at Windermere Cay wouldn't answer follow-up questions or even give a name when asked—the name on the Windermere Cay e-mail read simply "Property Manager."

Better yet, don’t ask

Not only is such a contract unenforceable, but it could expose anyone promulgating it to legal repercussions, Santa Clara University Law Professor Eric Goldman explained.

"It would be a terrible idea to enforce this in court. A judge is going to shred it," Goldman said in an interview. "If a person posts an Instragram photo of them having a party in their apartment, the landlord is saying they own that as well. The overreach reinforces that this clause is bad news, and it may be actionable just to ask."

States have taken action in the past against businesses that pushed "no review" paperwork on customers, even when those businesses haven't been crazy enough to attempt enforcing the illegal deals. It's been clear that such contracts are legally questionable since at least 2003, when theNew York v. Network Associatesdecision came out. In that case, a judge found that telling customers they couldn't publish reviews of software "without prior consent" violated New York's unfair competition law. In Goldman's opinion, "no review" contracts like the one pushed by Windermere could also lead to legal trouble under federal law, since the FTC Act bars "unfair and deceptive" business practices.

Goldman has written about some of the most notable attempts by businesses to squelch customer reviews, although he said the Windermere Cay Social Media Addendum is the first time he has seen such an attempt in the landlord-tenant context.

For his part, Martin says he really doesn't have any complaints about his apartment or the building—after all, he just chose to live there for another year. "It's an incredibly new complex, and I'm the first person to live in my unit," he said.